Subject:
Title
Capital Project Funding Agreement with Salvador Dali Museum, Inc. for the Dali Museum Expansion Project.
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Recommended Action:
Recommended Action
Approval of the Capital Project Funding Agreement with the Salvador Dali Museum, Inc. (Dali) for the revised Dali Museum Expansion Project (Museum Project).
• The agreement with Dali is for $25,160,000.00 and supports the reconstruction and construction of The Dali Museum Expansion Project.
• On May 17, 2023, the Tourist Development Council unanimously approved funding the Dali’s “revised” Museum Project for a total of $34 million.
• On August 1, 2023, the Board of County Commissioners approved the staff’s recommendation to fund the Dali’s Museum Project for a total of $25,160,000.00.
• Dali has since scaled back programmatic costs, which has decreased the overall construction costs to $60 million.
• Quarterly payments to Dali will be made on a reimbursement basis.
• The Museum Project is scheduled to begin in summer 2024 and be completed by fall 2028.
• Funding for this Capital Project Funding Agreement is budgeted in the amount of $1.5 million in Fiscal (FY) Year 2024 in the Tourist Development Fund. The total amount of $25,160,000.00 is anticipated in the multi-year fiscal plan for the Tourist Development Fund and partially included in the FY25 Proposed Operating Budget.
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Strategic Plan:
Foster Continual Economic Growth and Vitality
4.6 Support a vibrant community with recreation, arts, and culture to attract residents and visitors
Summary:
Summary
The agreement with Dali provides support for the construction and reconstruction of The Dali Museum Expansion Project which has met the criteria defined in the Capital Projects Funding Program Guidelines. In addition to the economic benefits from this project, the County will also receive tourism promotion benefits, which were negotiated by the Convention and Visitors Bureau (CVB) and are effective for a period of ten years. Reimbursements to Dali will be paid on a quarterly basis. It is estimated the County will complete all payments approximately one year prior to completion of the Museum Project.
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Background Information:
On April 9, 2019, the Board approved for the Museum Project to be included in the Capital Project Funding Program (CPFP) funding cycle.
On November 12, 2019, the Board approved $17.5 million in funding for the Museum Project. The total estimated project cost was $35 million. An agreement which included full payment upon project completion was never finalized.
On October 26, 2022, the Dali presented an updated expansion plan to the TDC requesting $34 million in County support, which was 50% of the revised project cost of $68 million. The Dali attributed the increase to the modified project scope and rising prices of materials and labor.
On February 28, 2023, during a joint meeting of the Board and TDC, The CVB Director presented information regarding the Dali’s revised expansion plans.
On May 17, 2023, the Dali presented the updated project to the TDC again, this time including revised attendance projections based on an updated analysis performed in November 2022 by Research Data Services, Inc. Following the presentation and discussion, the TDC unanimously approved the Dali’s funding request of $34 million.
On August 1, 2023, the Board considered and approved staff’s recommendation to fund the Dali’s revised Museum Project for a total of $25,160,000. In addition, the Board informed the Dali that it has the option to request additional funding if and when a resolution with the Army Corp of Engineers regarding cost sharing for beach nourishment is reached.
Since that time, Dali has scaled back on some of the programmatic costs of the Museum Project which have reduced the overall construction costs to $60 million. Although reduced, Dali has stated the changes will not affect the direct incremental impact the County will realize from the Museum Project which is expected to draw 1.3 million room nights, $1.9 billion in economic impact and 4.9 million attendees over a ten year period.
The Capital Project Funding Agreement being presented today includes negotiated Tourism Promotion Benefits that are effective for a period of ten years from the date of contract execution. Benefits include admission tickets for promotional giveaways, permanent signage acknowledging the County’s funding contribution, collaboration on joint marketing campaigns, media tours and influencer opportunities, inclusion in press releases, and more as detailed in Exhibit B.
A FY24 budget amendment was approved by the Board on July 16, 2024, to allow for payments to Dali in the current year.
Fiscal Impact:
Total Cost: $25,160,000.00
Funding to support the Capital Project Funding Agreement for $25,160,000.00 is provided through the Tourist Development Tax Fund.
Staff Member Responsible:
Brian Lowack, Director, Convention and Visitors Bureau
Partners:
Tourist Development Council
Attachments:
Capital Project Funding Agreement
Capital Projects Funding Program Guidelines